Prates and barbershop in Petrobras’ communication – 03/18/2024 – Adriana Fernandes

The tweets sent last week by Jean Paul Prates on the social network Latin American oil company.

“It is legitimate for the CA to take a position guided by the President of the Republic and his direct assistants who are the ministers. This is exactly what happened in relation to the decision on extraordinary dividends”, he wrote last Wednesday night (13) .

The following day, faced with more negative repercussions that took the imbroglio to a new level, the president of Petrobras used the same social network: “there is no retreat in my statements this week”.

The boardroom’s communication around the payment of extraordinary dividends began at Deep Dive, a meeting held in New York, on January 30, to bring the company closer to international investors and increase transparency in the market.

On page 99 of the extensive English presentation, the company wrote that “shareholder remuneration has followed the same decision framework since 2021.”

The speech to investors generated a chain of expectations.

Prates promised what he couldn’t. The governance of the state-owned company, provided for in article 29 of the company’s statute, states that the Board of Directors (Board of Directors) is responsible for defining global risk management, investment, information disclosure and dividend distribution policies.

The positioning of the company’s management was decisive in creating false expectations among investors about the payment of extraordinary dividends.

Almost a month later, at the end of February, Prates indicated, in an interview with the Bloomberg agency, that the state-owned company should be more cautious regarding the distribution of dividends to shareholders. According to him reported at the time, this would be due to the company’s investments in energy transition with the aim of becoming an energy company in addition to oil, also focusing on renewable sources.

Later (a few days before the Board meeting), deciding on the retention of dividends on March 7, the company forwarded to the directors that the board’s proposal was to pay 50% of the extraordinary dividends and allocate the other half to a reserve technique.

A central point in the crisis, which is not only political but also communication, is the assessment of the conditions for defining the risk margin to pay dividends in a balance between the company’s debt and cash so that the planned investment would not be held back by budget restrictions. .

In 2022, as the company’s technical area pointed out in a report sent to Petrobras’ CA, anticipated by journalist Malu Gaspar from O Globo, the parameters established by the company itself no longer existed.

Among them, the price of a barrel (Brent) of US$ 100, diesel margins at historic highs and strong cash generation, which allowed the payment of extraordinary dividends in every quarter.

Under 2022 conditions, the confidence level for risk appetite was 90%. Now, faced with new conditions, the level of confidence drops by more than 10 percentage points in a scenario where Petrobras pays half of the extraordinary dividends, according to information obtained by this column from Sheet.

Important detail: the parameter of the degree of confidence for the risk of paying 100% of extra dividends in 2022 was presented to the Federal Audit Court. Before defining the future regarding retained dividends, it is likely that the court will be consulted.

In command of the Brazilian giant, the president of Petrobras should know that the company’s communication cannot be carried out in an amateur way via social media — a practice that, unfortunately, is increasingly followed by Brazilian authorities and politicians. The difference, in the case of Petrobras, is that Prates is no longer a senator of the Republic.

The release of the minutes of the controversial decision by the Petrobras Board of Directors will help clarify the truth of the facts.

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